by Eric King – Executive Director, Energy Planning and Inventory Commission
Kentucky’s competitive industrial electricity rates, ample land and water, expanding fiber networks and support for major development position the Commonwealth to attract data center investment, jobs and long-term tax revenue. Kentucky also has an opportunity many states missed: the chance to write the rules before costs are locked in. Major data center proposals are already testing every part of our electric system, from generation and transmission to local land-use decisions. Choices now will determine whether this development strengthens Kentucky or leaves existing customers paying for infrastructure built for someone else.
At a recent discussion hosted by Dependable Power First Kentucky, State Senator Robby Mills, East Kentucky Power Cooperative General Counsel David Samford and I returned to the same point: Kentucky can welcome major investment while protecting existing ratepayers. That requires sound rules, dependable generation and planning before commitments are made.
Kentucky is better protected than many people realize. The General Assembly created the Energy Planning and Inventory Commission in 2024, before hyperscale projects dominated public debate, to assess the Commonwealth’s energy needs. Utilities plan their individual systems. EPIC brings those plans together to assess what they mean for Kentucky’s reliability, affordability and ability to grow. EPIC has cataloged 61 generating facilities representing more than 21,000 megawatts and is building a single statewide view of demand, supply and transmission.
Our first report on data centers also examined what happened in other states. The clearest lesson is that good intentions cannot substitute for timely rules. Once infrastructure has been built and deemed used and useful, reassigning who pays becomes much harder. Kentucky’s window to act is now.
The governing principle is straightforward: the customer that causes a cost should bear it. For large-load customers, that means identifying and assigning costs across generation, transmission and distribution. Tariffs and contracts can require meaningful application fees, upfront infrastructure payments, financial security, minimum billing commitments and protections against stranded costs if projects do not materialize. EKPC’s data center tariff provides an important Kentucky example. Our utilities’ different structures and regional markets, however, may require different tools.
Cost allocation is only half the equation. Kentucky must also have enough electricity to serve new demand reliably. Data centers run around the clock at high load factors and require firm capacity nearly every hour. They cannot be planned for like ordinary commercial customers.
That is why Kentucky’s existing coal fleet matters. The fastest megawatt available is the one already interconnected and running. Our coal plants are dispatchable, fuel-secure assets backed by decades of investment in transmission, transportation, equipment and skilled workers. Retiring dependable generation before adequate replacement power is operating would discard an immediate advantage when speed to market is critical. Kentucky should preserve and modernize viable coal units, use them more fully where appropriate and add generation without subtracting dependable capacity we still need.
Not every proposed data center belongs in every community. EPIC does not recruit projects, and local officials and residents must decide whether proposals fit. They deserve clear information about land and water use, infrastructure demands, tax benefits, employment and long-term obligations. Strong standards do not repel serious investment. Strong standards give credible developers a clear path while filtering out speculative projects and protecting families, businesses and land.
EPIC is developing the Kentucky Electricity Adequacy Plan, or KEAP, to provide a statewide assessment of demand, generation and transmission. That work will help determine where existing resources are sufficient and where new investment is truly necessary. This work will distinguish necessary investment from costly infrastructure built around speculative demand. We will equip local, state and federal leaders, along with Kentuckians, with a clear picture of the power we have, the needs ahead and the choices that require action. Through KEAP, EPIC will identify where reliability and affordability may be at risk and recommend steps to prepare Kentucky for future demand. Our job is to ensure those decisions begin with one straight set of facts.
Federal policy must reinforce that work. The National Coal Council’s recent roadmap points in the right direction. FERC and grid operators should clear interconnection backlogs and value dispatchability, on-site fuel and performance under stress. EPA should complete its proposed repeal of the 2024 Carbon Rule so otherwise viable coal plants are not forced offline as demand rises. Congress should make that certainty durable, while the Department of Energy supports modernization of the coal fleet and supply chain.
Through EPIC, Kentucky has an opportunity to build a national model for statewide energy planning, bringing utility expertise, a clear statewide picture and practical recommendations together to equip local, state and federal leaders before major commitments are made. Kentucky does not have to choose between economic growth and protecting its people. If we plan before the wave, keep dependable coal generation online and insist that new customers pay the costs they create, we can secure both.
